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vodomira [7]
3 years ago
9

Nielson Corp. sells its product for $6,600 per unit. Variable costs per unit are: manufacturing, $3,600, and selling and adminis

trative, $75. Fixed costs are: $18,000 manufacturing overhead, and $24,000 selling and administrative. There was no beginning inventory at 1/1/15. Production was 20 units per year in 2015–2017. Sales were 20 units in 2015, 16 units in 2016, and 24 units in 2017. Income under absorption costing for 2017 is
A) $4,800.

B) $8,400.

C) $9,600.

D) $13,200.
Business
1 answer:
Anvisha [2.4K]3 years ago
6 0

Answer:

B) $8,400

Explanation:

Absorption costing consider all the cost incurred in production either variable or fixed as production cost.

As we know variable cost vary with the change in the sale but the fixed costs remains constant whatever the level of sale is.

As per given data

Selling price = $6,600

Variable manufacturing cost = $3,600

Manufacturing Fixed Cost = $18,000

Total cost per unit = $3,600 + $18,000/20 = $4,500

Sales = Selling price x Numbers of units sold = $6,600 x 16 = $105,600

Cost of goods sold = Units sold x Cost per unit = 16 units x $4,500 = $72,000

Gross income = Sales - Cost of Goods sold = $105,600 - $72,000 = $33,600

Selling and Admin Cost = Variable cost + Fixed = (16 x $75) + $24,000 = $25,200

Net Income = Gross Income - Selling and Admin cost = $33,600 - $25,200 = $8,400

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3 years ago
What is goodwill in a business sale and why is it amortized in the business financial statements
astra-53 [7]

Answer:

See below

Explanation:

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3 years ago
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3 years ago
The following information relates to the assets of Westfield Semiconductors as of December 31, 2019. Westfield uses the straight
Salsk061 [2.6K]

Answer:

See the explanation below.

Explanation:

Given the following:

Asset    Acquisition-Cost   Expected-Life    Residual-Value   Time-Used

Land        $104,300                 Infinite               $100,000            10 years

Building     430,000               25 years                30,000             10 years

Machine     285,000                5 years                  10,000              2 years

Patent          80,000                10 years                     0                    3 years

Truck            21,000             100,000 miles           3,000         44,000 miles

Therefore, we have:

Building annual depreciation = ($430,000 - $30,000) / 25 = $16,000

Building net book value (NBV) = $430,000 - (16,000 * 10) = $270,000

Machine annual depreciation = ($285,000 - 10,000) / 10 = $27,500

Machine NBV = $285,000 - ($27,500 * 2) = $230,000

Patent annual amortization = $80,000 / 10 = $8,000

Patent net written down value = $80,000 - ($8,000 * 3) = $56,000

Truck accumulated depreciation = ($21,000 - 3,000) * (44,000 / 100,000) = $7,920

Truck NBV = $21,000 - $7,920 = 13,080

Westfield Semiconductors Balance Sheet (Partial) as of December 31, 2019.

<u>Details                                                             $</u>

Property, plant, and equipment:

Land (Cost)                                                104,300

Building (NBV)                                          270,000

Machine (NBV)                                         230,000

Truck (NBV)                                             <u>    13,080</u>

Total PPM                                                  617,380

Intangible assets:

Patent (NRV)                                              <u> 56,000</u>

Total tangible and intangible assets    <u> 673,380</u>

4 0
3 years ago
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